Member countries of the euro area, and the peripheral states in particular, are faced with an especially difficult problem: on the one hand, they urgently need stronger economic growth to pay off the mountains of debt they have accrued and have to reduce unemployment but, on the other hand, they have no scope to use fiscal policy to stimulate the economy. One wayto strengthen economic growth without burdening public finances could be "fiscal devaluation". This reduces social security contributions for employers - and therefore ancillary wage costs - leading to companies being more price competitive than their foreign competitors. This, in turn, should stimulate exports and result in positive employment effects. Reducing ancillary wage costs could be financed by an increase in value-added tax. The present study shows that fiscal devaluation in the individual member countries of a currency union may help to stabilize economic growth in the short term. Therefore, this instrument should be particularly important for the crisis countries of the euro area though it by no means replaces the implementation of structural reforms required to increase economic growth in the long term.